BEFORE THE DAKSHINA KANNADA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANGALORE
Dated this the 15th of September 2010
PRESENT
SMT. ASHA SHETTY : PRESIDENT
SMT.LAVANYA M. RAI : MEMBER
COMPLAINT NO.39/2010
(Admitted on 23.01.2010)
Smt. Pushpa,
Wo. Late Prabhakar,
Aged about 52 years,
RA. Malladka House,
Beliyoor Village, Perne Post,
Bantwal Taluk,
Dakshina Kannada. …….. COMPLAINANT
(Advocate for the Complainant: Sri.Sanjay D).
VERSUS
Project Officer,
Shree Kshethra Dharmasthala Gramabivriddi Yojane,
Bantwal Branch,
Bantwal, Dakshina Kannada. ……. OPPOSITE PARTY
(Advocate for the Opposite Party: Sri. K.S.Sharma)
***************
ORDER DELIVERED BY PRESIDENT SMT. ASHA SHETTY:
1. This complaint is filed under Section 12 of the Consumer Protection Act alleging deficiency in service against the Opposite Party claiming certain reliefs.
The brief facts of the case are as under:
The Complainant is the member of Sampoorna Suraksha Yojane Welfare Scheme of the Opposite Party along with her two sons and daughter and has paid Rs.530/- as membership to the Opposite Party as per receipt No.672709 dated 01.04.2009 and the same is valid for one year. As per the above said scheme, the Opposite Party undertaken to reimburse all medical expenses upto Rs.20,000/- to the Complainant.
When the matter stood thus, the Complainant was admitted to Dhanvanthari Hospital at Puttur for her psychological problem on 24.07.2009 and was discharged on 28.07.2009 and has spent Rs.1,403/- towards the treatment. Thereafter, the Complainant submitted the claim papers along with the receipt, discharge summary and consolidated bill to the Opposite Party. But the Opposite Party refused to receive the claim form from the Complainant. Thereafter, the Complainant sent the above documents with the registered notice dated 28.08.2009 to the Opposite Party and the same has been served to the Opposite Party but failed to consider the claim of the complainant.
The another allegation of the Complainant is that, the Opposite Party issued a membership receipt which does not contain the details of the name of the Network hospitals, how pre-authorization is obtained, which are the diseases covered, what are the pre-conditions and who has to obtain pre-authorization and further, the Opposite Party not issued the policy certificate nor any vital details to claim the benefit under the policy. Hence the above Complaint is filed by the Complainant before this Forum under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction from this Forum to the Opposite Party to pay Rs.1,403/- along with interest at 12% p.a. from 24.07.2009 till payment and also claimed Rs.15,000/- as compensation and cost of the proceedings.
2. Version notice served to the Opposite Party by RPAD. Opposite Party appeared through their counsel filed version stated that, the Opposite Party is a N.G.O. Social Service Organization not working for any gain. There is no relation of consumer and service provider. Hence this Forum has no jurisdiction to try the case. It is further stated that, the Complainant is a member of Sampoorna Suraksha Scheme along with her children for the year 2009-10. The original membership registration form was delivered to her and the same has been signed and confirmed and agreed to abide by the same. “Sampoorna Suraksha” is a welfare scheme to give financial assistance to the Shree Kshethra Dharmasthala Rural Development Project (herein after called ‘S.K.D.R.D.P.’) self help group members during their days of ailments/accidents launched through S.K.D.R.D.P during 2004-05. The entire scheme is designed on self – mutual help basis. Only interested members of S.K.D.R.D.P can register for the scheme by contributing annual subscription. A part of the subscription is paid as premium to Insurance Company to cover the eligible upto the prefixed amount and upto package amount for hospitalization expenses ‘cashless’ in network hospitals. The remaining amount is used to reimburse delivery expenses and to pay domiciliary treatment rest allowance, consolation for disability, death due to accident, normal death, damage to dwelling house as explained in the scheme.
It is stated that, knowing fully well and understood the norms of the scheme, the Complainant has availed inpatient treatment in a non-network hospital where there is no cashless treatment. It is stated that, as per the norms of the scheme for reimbursement of treatment cost in claim – form ‘B’ through the project office of S.K.D.R.D.P at Bantwal but she failed to do so. It is stated that, instead of submitting the claim in the prescribed claim form ‘B’ which is one of the norms to be followed by the member without which claim cannot be settled and it is stated that, even at this stage she can submit her claim for reimbursement of her inpatient treatment in claim form ‘B’ along with relevant hospital bills and other documents. If she is entitled the same will be settled and contended that there is no deficiency and prayed for dismissal of the Complaint.
3. In view of the above said facts, the points now that arise for our consideration in this case are as under:
- Whether the Complainant is a consumer and this Forum has jurisdiction to entertain this complaint?
- Whether the Complainant proves that the Opposite Party has committed deficiency in service?
- If so, whether the Complainant is entitled for the reliefs claimed?
- What order?
4. In support of the complaint, Smt.Pushpa (CW1) filed affidavit reiterating what has been stated in the complaint and answered the interrogatories served on her. One Mr.Chethan Kumar (CW2) – witness of the Complainant filed affidavit and answered the interrogatories served on him. Ex C1 to C5 were marked for the Complainant as listed in the annexure. One Chandrashekhar (RW1), Project Officer of the Opposite Party filed counter affidavit and answered the interrogatories served on him. Ex R1 to R5 were marked for the Opposite Party as listed in the annexure. Both parties produced notes of arguments along with citations.
We have considered the notes/oral arguments submitted by the learned counsels and also considered the materials that was placed before this Forum and answer the points are as follows:
Point No.(i): Affirmative.
Point No.(ii) to (iv): As per the final order.
Reasons
5. Point No. (i):
As far as point No.(i) is concerned, admittedly the Complainant was the member of Sampoorna Suraksha Yojane Welfare Scheme of the Opposite Party along with her two sons and daughter and paid Rs.530/- as membership fee to the Opposite Party as per receipt No.672709 dated 1.4.2009 to became a member. That means, the Opposite Party is not giving any free service to the Complainant. But at the same time, the Opposite Party admittedly received consideration from the Complainant and introduced the above scheme. Thus, Complainant is a consumer and the complaint filed by the Complainant is maintainable and this FORA has jurisdiction to entertain the complaint. Point No.(i) held in favour of the Complainant.
Point No.(ii) to (iv):
As far as point No.(ii) to (iv) are concerned, it is admitted that, the Complainant was the member of Sampoorna Suraksha Yojane Welfare Scheme of the opposite party along with her two sons and daughter and paid Rs.530/- as membership to the opposite party as per receipt No.672709 dated 01.04.2009 and the said insurance is valid for one year as per Ex C1. It is also admitted that, the Sampoorna Suraksha Yojana is the welfare scheme to give financial assistance to the members of Shree Kshethra Dharmasthala Rural Development Project (herein after called ‘S.K.D.R.D.P.’). The above said Sampoorna Suraksha Welfare Scheme will reimburse the medical expenses upto Rs.20,000/- to the Complainant.
Now the point in dispute between the parties before this Forum is that, according to the Complainant, the Opposite Party failed to reimburse the medical expenses. The another allegation of the Complainant is that, the membership receipt issued by the Opposite Party is vague and does not contain the details of the name of the Network hospitals, how pre-authorization is obtained, which are the diseases covered, what are the pre-conditions and who has to obtain pre-authorization and Opposite Party not issued the policy certificate and the receipt issued by them does not give or contains vital details of the mediclaim policy.
On the contrary, the Opposite Party took a contention that, the Complainant is a member of Sampoorna Suraksha Yojane Welfare Scheme of the Opposite Party and the original membership registration form was delivered to the Complainant along with the brochure of the Opposite Party pertaining to Sampoorna Suraksha Yojane Welfare Scheme for the year 2009-10 which contains all the details and those documents are in Kannada language. After having understood the same, the Complainant has given declaration and affirmed that she is bound by the same. And further contended that, the Complainant should have submitted claims as per the norms of the scheme for reimbursement of treatment cost in claim form “B’ through the project office of S.K.D.R.D.P but she failed to do so and contended that there is no deficiency.
The Complainant filed affidavit by way of evidence and examined as CW1 and CW2 and produced Ex C1 to C5. Opposite Party also filed affidavit by way of evidence and produced Ex R1 to R5.
From the outset of the records available on the file before this Forum, we find that, the Ex C1 i.e., receipt No.672709 shows that the Complainant paid the membership fee of Rs.530/- to the Opposite Party and the same has been acknowledged by the Opposite Party and thereby she became the member of Sampoorna Suraksha Yojane Welfare Scheme introduced by the Opposite Party. Further, the Ex C2 i.e., discharge summary shows that the Complainant undergone psychological problem and admitted to Dhanvanthari Hospital at Puttur, on 24.07.2009 and was discharged on 28.07.2009. The Ex C3 is the consolidated bill issued by the Dhanvanthari Hospital Puttur shows that the Complainant spent Rs.1,403/- towards the treatment. The Ex C4 is the Lawyer’s legal notice, wherein, the Complainant called upon the opposite party to pay Rs.1,403/- spent by the Complainant. The Ex C5 is the reply given by the Opposite Party at the undisputed point of time, wherein, the opposite party categorically admitted that the Sampoorna Suraksha Yojane is a welfare scheme to give financial assistance to the poor people in their days of problems necessitating hospitalization. Further it is categorically admitted that, a part of the total subscription amount received from the Complainant by the Opposite Party is paid as premium to the Insurance Company to look after the eligible upto the pre-fixed amount and upto packaged amount for hospitalization expenses for providing “cashless treatment” in Network Hospitals (Para 6 page No.2 of the reply notice dated 12.09.2009).
However, we are very surprised to note that, the complaint came to be filed by the Complainant for such a meager amount of Rs.1,403/- before this Forum despite of furnishing all valid documents. By considering the above, we have directed both parties to settle the disputes by keeping the parties present before this Forum. But both the parties are absent and not co-operated for settlement of the dispute.
We have observed that, the Opposite Party received a membership fee i.e., Rs.530/- from the Complainant and out of said amount, a part of the subscription is paid as premium to the Insurance Company to cover the eligible upto the prefixed amount and upto package amount for hospitalization expenses cashless in network hospitals. The remaining amount is used to reimburse delivery expenses and to pay domiciliary treatment rest allowance, consolation for disability, death due to accident, normal death, damage to dwelling house as explained in the scheme. That means, the entire amount received from the Complainant by the Opposite Party is paid to the Insurance Company. It is the primary duty of the Opposite Party to disclose the same to the general public in other words all the members under the scheme. The Opposite Party categorically admitted that, it is a Non-Government Organization body. It is a settled position that, no N.G.O’s can act according to their convenience. We noticed that, the above said N.G.O/Opposite Party without issuing any insurance certificate contains the terms and conditions which is very much mandate while introducing the welfare/Insurance Scheme to the rural people in this case. The Opposite Party just issued a membership receipt after obtaining Rs.530/- from the Complainant by concealing the insurance particulars which includes terms and conditions and other particulars. The NGO i.e., the Opposite Party no doubt introduced a Welfare Scheme to the public but not issued any certificates/terms and conditions and other details to avail the benefit under the scheme to the member of the above said Insurance Scheme.
We further find that, the Opposite Party produced Ex R1 to R5 before this Forum stating that, the terms and conditions explained in the brochures are made known to the Complainant and she was aware of the same and signed the declaration. But there is nothing mentioned on Ex C1 that the above said terms and conditions are furnished to the Complainant. The Opposite Party being a N.G.O. ought to have enclosed the above particulars to avail the benefits. The Ex C1 admittedly given by the Opposite Party, some relevant declaration portion reproduced here under:-
Except the above, no terms and conditions which includes network hospital details has been shown in the above said document. The Complainant has kept in total darkness and no details are being provided to the Complainant. As we know, the contents and meaning of the Sampoorna Suraksha Welfare Scheme should be explained to the Complainant/member in order to obtain the benefits under the Scheme. As admitted by the Opposite Party that, it is a welfare scheme introduced by the Opposite Party through the Insurance Company to the rural people. When that being the case, it is the bounden duty of the N.G.O’s to see that the said Insurance Scheme should reach to the rural people for the purpose for which it has been introduced.
We have noticed that, there is a force in the argument addressed by the Complainant, because, we have scrutinized the receipt issued by the Opposite Party, wherein, it do not disclose any terms and conditions or any details to avail the benefits. That the Opposite Party has took a specific contention before this Forum stating that, the Complainant should have submitted the claims as per the norms of the scheme for reimbursement of treatment cost in claim form ‘B’ through the Project Office, the claim of the Complainant cannot be considered until and unless the norms enumerated under the scheme is not complied. Under that circumstances, it is the primary duty of the Opposite Party to prove that the said norms of the policy/scheme was made known to the Complainant/the member by furnishing all the norms enumerated under the scheme. When the Complainant vehemently contended that, the terms and conditions of the scheme was not issued and no policy was furnished and not aware of the Insurance Companies, under that circumstances, the Opposite Party should have proved before this Forum that, the same has been explained and accepted by the Complainant. Being aware of the existence of the policy/scheme is one thing and being aware of the contents and meaning of the clauses of the policy/scheme is another. It is not the case of the Opposite Party that, contents and meaning of the scheme were made known to the Complainant by furnishing the insurance particulars. It is also nowhere on record that, the Opposite Party has explained the meaning of all exclusion clauses to the Complainant or had explained the meaning of all exclusion clauses to the Opposite Party by the Insurance Company and requested them in turn to bring them to the notice of the Complainant. Because the Opposite Party itself admitted that, the part of the premium amount received from the Complainant paid to the Insurance Company. When that being the case, the Opposite Party should have disclosed in which Insurance Company they have paid the premium amount received from the Complainant more so in Ex R1 to R5, nothing has been disclosed by the Opposite Party.
The National Commission in a case of National Insurance Co. Limited versus D.P. Jain, III (2007) CPJ 34 (NC), observed as under:
9. Regulation 3 of the Insurance Regulatory and Development Authority (Protection of Policy Holders’ Interests) Regulations 2002, framed by Insurance Regulatory and Development Authority (IRDA) in exercise of powers under Section 114(A) of the Insurance Act, 1938 read with Sections 14 and 26 of the Insurance Regulatory and Development Authority Act 1999.
10. The Regulatory came into effect from the year 2002. Therefore, the policies which are issued after 2002 are being covered by the said Regulations and are required to be followed by the Insurance Company.
11. It is to be stated that the aforesaid Regulations are framed by the IRDA to protect the interests of the policy holders. Firstly, Regulation 3 requires to be followed by the insurance companies so that the terms of the insurance policy do not operate harshly against the insured and in favour of the insurer.
12. Regulation 3 thereof reads as under:
3. Point of sale – (1) Notwithstanding anything mentioned in Regulation 2(e) above, a prospectus of any insurance product shall clearly stated the scope of benefits, the extent of insurance cover and in an explicit manner explain the warranties; exceptions and conditions of the insurance cover and in case of life insurance, whether the product is participating (with profits) or non-participating (without profits). The allowable rider or riders on the product shall be clearly spelt out with regard to their scope of benefits, and in no case, the premium relatable to health related or critical illness riders in the case of term or group products shall exceed 100% of premium under the basic product. All other riders put together shall be subject to a ceiling of 30% of the premium of the basic product. Any benefit arising under each of the rider shall not exceed the sum assured under the basis product.
Provided that, the benefit amount under riders shall be subject to section 2(11) of the Insurance Act, 1938.
Explanation – the rider or riders attached to a life policy shall bear the nature and character of the main policy, viz. participating or non-participating and accordingly the life insurer shall make provisions, etc. in its books.
(2) An insurer or its agent or other intermediary shall provide all material information in respect of a proposed cover to the prospect to enable the prospect to decide on the best cover that would be in his or her interest.
(3) Where the prospect depend upon the advice of the insurer or his agent or an insurance intermediary, such a person must advise the prospect dispassionately.
(4) Where, for any reason, the proposal and other connected papers are not filled by the prospect, a certificate may be incorporated at the end of proposal form from the prospect that the contents of the form and documents have been fully explained to him and that he has fully understood the significance of the proposed contract.
(5) In the process of sale, the insurer or its agent or any intermediary shall act according to the code of conduct prescribed by-
(i) the Authority;
(ii) The Councils that have been established under Section 64C of the Act; and
(iii) The recognized professional body or association of which the agent or intermediary or insurance intermediary is a member.
From the aforesaid regulation it is clear that,
- the prospectus of insurance product are required to clearly state the scope of benefits, the extent of insurance cover and in explicit manner explain the warranties, exceptions and conditions of the insurance cover. The phraseology used is ‘mandatory’ by providing that it shall be stated clearly;
- Sub-Regulation (2) provides that an insurer or its agent or other intermediary shall provide all material information in respect of the proposed cover to the insured;
- Sub-Regulation 4 also provides that if the proposal and other connected papers are not filled by the prospect, a certificate is required to be incorporated at the end of the Proposal Form from the prospect that the contents of the form and documents have been fully explained to him.
From the above, it is abundantly clear that, the rule making authority has taken much care to protect the interest of the consumer. But in the instant case, the Opposite Party contended that part of the amount paid to the Insurance Company as stated supra but not issued any insurance policy to the Complainant and raised a contention that, it is not an Insurance policy or not doing any profit but helping the rural people. We do not understand why the N.G.O’s/Opposite Party is concealing the particulars of the Insurance Companies to the public/consumers/Complainant herein. It is significant to note that, the N.G.O’s/Opposite Party help the rural people through the Insurance Company and at the same time it should be kept in mind that the Government was not directed the Opposite Party not to follow the binding regulations. It may be a N.G.O./Opposite Party or Government bodies or Insurance Companies, when they follow the binding regulations, at the same time it is mandatory in nature so as to explain the regulations/exclusion clauses to the beneficiaries/Complainant herein. Just taking signature on the printed form and claiming as if they are paying amount from their pocket. Apart from the above, we further noticed that, these N.G.O’s/Opposite Party are not giving free service to the rural people. On the other hand, they are receiving membership fee from the public and out of the said amount part payment is made to the Insurance Company to avail hospitalization benefits as stated by the Opposite Party. Similarly, in the instant case, the Opposite Party received the consideration towards the scheme and not furnished the insurance particulars and other binding norms to the Complainant and dragged the Complainant before this Forum for a meager amount. Complainant has all valid documents to entitle the benefits under the scheme in this case, despite of that Opposite Party failed to reimburse the amount.
In our view, the unexplained or unnoticed exclusion clauses or regulations or rules would not be binding to the insured / member herein the Complainant. The reason being, the rules/regulations are mandatory in nature so as to protect the consumers’ interest. It may be a N.G.O. or Companies, they must follow the regulations so as to protect the consumers interests and shall be clear. The exclusion clauses are required to be ignored if the trust or its agent or intermediary does not adhere to the mandatory requirement of explaining the exclusion clauses before issuance of insurance cover/scheme.
In the instant case, the Opposite Party made the Complainant to sign on the declaration but at the same time one should keep in mind that the above said scheme is introduced to the rural/poor people. As we know, they are not educated and qualified to understand the terms and conditions, under that circumstances, the Opposite Party ought to have furnished all the terms and conditions to the Complainant to avail the benefit without concealing any particulars. But the Opposite Party failed to do the same and the contention taken by the Opposite Party cannot be made applicable to the Complainant because the same has not been explained/ disclosed to the Complainant while issuing the receipt which amounts to deficiency in service.
In the above circumstances, we hold that, the Opposite Party i.e., N.G.O. who received the amount from the Complainant without furnishing the insurance particulars and other details to claim the benefit under the scheme amounts to deficiency in service.. Therefore, the Opposite Party i.e., Shree Kshethra Dharmasthala Gramabivriddi Yojane represented by its Project Officer is hereby directed to pay Rs.1,403/- to the Complainant and also pay Rs.5,000/- as compensation for the harassment and inconvenience caused to the Complainant and Rs.1,000/- awarded as cost of litigation expenses. Payment shall be made within 30 days from the date of this order.
6. In the result, we pass the following:
ORDER
The complaint is allowed. Opposite Party i.e., Shree Kshethra Dharmasthala Gramabivriddi Yojane represented by its Project Officer is hereby directed to pay Rs.1,403/- (Rupees one thousand four hundred and three only) to the Complainant and also pay Rs.5,000/- (Rupees five thousand only) as compensation and Rs.1,000/- (Rupees one thousand only) as cost of litigation expenses. Payment shall be made within 30 days from the date of this order.
On failure to pay the aforesaid total amount within the stipulated time, the Opposite Party is liable to pay interest at the rate of 10% p.a. from the date of failure till the date of payment.
The copy of this order as per the statutory requirements be forwarded to the parties free of charge and therefore the file be consigned to record.
(Page No.1 to 17 dictated to the Stenographer typed by her, revised and pronounced in the open court on this the 15th day of September 2010.)
PRESIDENT MEMBER
ANNEXURE
Witnesses examined on behalf of the Complainant:
CW1 – Smt.Pushpa – Complainant.
CW2 – Mr.Chethan Kumar – witness of the Complainant.
Documents produced on behalf of the Complainant:
Ex C1 – 31.03.2009: Copy of the membership receipt.
Ex C2 – 24.07.2009: Original Discharge Summary.
Ex C3 – 29.07.2009: Original consolidated bill.
Ex C4 – 28.08.2009: Copy of the Lawyer’s notice.
Ex C5 – 12.09.2009: Reply by the Opposite Party to the above said legal notice.
Witnesses examined on behalf of the Opposite Party:
RW1 – Chandrashekhar, Project Officer of the Opposite Party.
Documents produced on behalf of the Opposite Party:
Ex R1 – : Form ‘B’ to be submitted by the members of the scheme including the Complainant to avail benefit of the scheme from the Opposite Party.
Ex R2 - : The brochure with information letter.
Ex R3 - : List of network hospitals.
Ex R4 – 28.08.2009: Lawyer’s notice issued by the Opposite Party.
Ex R5 – 12.09.2009: Reply of the Opposite Party.
Dated:15.09.2010 PRESIDENT
